Posted on Apr 28, 2018
Despite being given the go ahead by Germany last month, Nord Stream 2, Russia’s 760 mile pipeline that is intended 55 billion cubic meters of gas per year through the Baltic, may yet be cancelled.
As well as intense opposition to the project within the EU’s 28 member states, Chancellor Angela Merkel is coming under increased pressure from within the European Commission itself.
Last year, in what was seen by most observers as an obvious attempt to undermine Nord Stream 2, the Commission proposed changes to its gas directive to make all import pipelines subject to rules that require that they not be owned directly by gas suppliers, apply non-discriminatory tariffs and to make capacity available to third parties.
The Nord Stream 2 project, fully owned by Russia’s gas export monopoly Gazprom, is far from complying with the EU’s so-called third energy package rules.
An EU legal opinion, dated March 1st, has however, rejected the proposal, saying that it “lacks any reasoning on the regulatory power of the Union over offshore pipelines” crossing an EU nation’s exclusive economic zone (EEZ). This is a blow to the Commission, which is extremely concerned that the project can be used to bypass traditional transit routes via Ukraine.
This concern, however, has now been voiced strongly by Chancellor Merkel herself.
“I made very clear that a Nord Stream 2 project is not possible without clarity on the future transit role of Ukraine,” Merkel told a joint news conference in Berlin with Ukrainian President Petro Poroshenko earlier this month. “So you can see that it is not just an economic issue but there are also political considerations,” she added.
She revealed that she had also discussed the project during a telephone call with Russian President Vladimir Putin earlier: “it cannot be that through Nord Stream 2, Ukraine has no further importance regarding the transit of gas,” she told him.
According to energy firm Naftogaz, Ukraine expects earn around $3 billion in 2018 from transit, but is the very fact of being a transit country that gives it geopolitical importance, and it is recognised that Nord Stream 2 would seriously undermine this, thus achieving one of the Kremlin's major goals.
The voices of discontent in the Commission are also currently resounding at the highest levels, thus advancing another Russian objective: dividing the West.
I’ve never seen a commercial project so intensely debated at the highest levels of European politics… this project is really polarising the E.U.
Director-General of the European Commission’s Energy directorate, Dominique Ristori has gone as far to state that if Nord Stream 2 goes ahead, the Commission will not support it.
He is on record as saying “We believe that Nord Stream 2 does not promote diversification of deliveries and delivery routes. When the pipeline is built, it will not be supported by the EU, and especially not by the European Commission.”
At member state level, opposition is equally vehement. “The Russians are playing a long game here. They’ve got the patience, and they’ve got the commitment,” said a senior Western official who spoke on the condition of anonymity. “We really think the Germans are not seeing the signs or don’t want to see the signs of how this could be very bad for Europe’s future.” The official raised concerns that in the event of Russia threatening an incursion into Baltic states, or indeed carrying out such actions as took place in Crimea in 2014, Russia could use the threat of switching off the gas in order to discourage or to inhibit any western response.
Both Lithuania and Ukraine have experienced what such energy dependence means and what is its price for the state and consumers. Nord Stream 2 poses threat not only to the fundamental goals of the Energy Union but it is also becoming a threat to the solidarity of EU states
Denmark is also voicing concerns over the project on security grounds. “This is not about gas, it is one of the most important foreign policy decisions in Denmark since the Cold War,” said senior foreign policy researcher Hans Mouritzen at the Danish Institute for International Studies.
In addition to opposition from the highest levels of the EU and it’s member states, Chancellor Merkel is also coming under pressure from US President Donald Trump to rethink.
“Germany hooks up a pipeline into Russia, where Germany is going to be paying billions of dollars for energy into Russia. And I’m saying, ‘What’s going on with that?’ ” Trump told Baltic leaders during a White House meeting earlier this month.
The point is whether Europe will withstand the pressure of the Americans, who have been using every opportunity to prevent the implementation of this project and at the same time persuade the Europeans to buy US LNG
Questions are now being asked as to how this project has been allowed to proceed to the point where, at the time of writing, thousands of pipeline sections have already been produced, and some €4 billion has been invested by commercial partners in the project (although European partners are investing, Gazprom will have complete control of the pipeline, should it go ahead, which raises even more questions), while even at European Commission level, and within member state's governments, there is such strong opposition.
There’s a unified, bipartisan approach from the United States. There’s a consolidated majority within the EU. From everywhere there’s pressure on Germany
Chancellor Merkel is becoming increasingly beleaguered; on the issue of Nord Stream 2 she has become estranged from her allies, and in some quarters is perceived as being perceived to be prepared to sacrifice Europe's security for German economic advantage.
Many observers note that decreasing confidence in her at both national and EU levels coincides with the rapidly rising profile on the international stage of French President Emmanuel Macron.
Bowing to international opinion and scrapping Nord Stream 2 may be her last chance to leave the international stage gracefully.
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